Very few investors or editors can sit still for this length of time, especially with markets as volatile as they have been recently. But long study of the Hulbert Financial Digest market-letter-monitoring data has led us to the conclusion that both infrequent trading and hyperactive trading can be equally successful -- in the right hands. (Equally, virtually every known market method can work -- again, in the right hands.)

Yamamoto appears to have the right hands. He was one of the few services to make money during the Crash of 2008. (See Oct. 29, 2008, column.)

Over the past 12 months through April, Yamamoto is up 21.32% by Hulbert Financial Digest count, compared to a 34.69% loss for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over 2009 to date, Yamamoto is up 14.3% versus a negative 1.16% for the total return Wilshire 5000.

Yamamoto says he's been publishing since 1983, but Mark Hulbert only began following him in at the beginning of 2002. Over that time, Yamamoto has achieved a 14% annualized gain, compared to a negative 0.6% annualized for the total return Wilshire.

Significantly, both Yamamoto's stock selection and his pure timing beat the market. A portfolio that switched between the Wilshire 5000 and T-Bills on his short-term signals gained 2.7% annualized from 2002 through April, in contrast to a 0.6% annualized loss for buying and holding. A portfolio that relied on Yamamoto's long-term signals to switch between the DJ Wilshire 5000 and T-Bills gained 5.5% annualized over this same period.

Yamamoto recently began buying stocks for the first time in a considerable period. (See March 12 column.) He is now 35% invested.

And that's enough, he says in his latest letter. He is solidly in the camp that views the recent rise as a bear-market rally.

He writes: "Today, investors are truly spoiled. Prior to the current bear cycle, people experienced a spectacular bull run from 1982 to 1999, or 18 years. ... Furthermore, in recent years, bear markets have been cyclical in scope. The last four bearish periods were measured in months, not years. The longest one was only 10 months. As we previously stated, market participants are taking things for granted."

Yamamoto's unpleasant conclusion: The last two secular bear cycles were 13 years and 16 years in duration. The average: 14.5 years. If equities topped out back in October 2007, then it would be the year 2021 or 2022 before this bear market is completed. ... Even if the length of the downside is shorter than the most recent secular cycles, it should be a lot longer that the previous cyclical downturns."

Yamamoto doesn't offer much rationale for his bearishness, although he says flatly that Obama's efforts to reflate will end in disaster:

"Do not misunderstand us, inflation is not today's enemy. On the contrary, deflationary forces continue to permeate the business environment. Yet in the effort to escape the grips of deflation, the government seeks to reflate the economy back to health. In a few years, hyperinflation will replace deflation as the threat."

Seemingly not now, however. Yamamoto is bearish on gold, short term.

The Yamamoto Forecast just snailed in, and I don't like to reveal portfolios until subscribers have gotten a look. This case is unusual, however: Yamamoto is basically unchanged since my March 12 column, just slightly more invested. He continues to be 5% exposed to Rydex Juno Fund Inv
RYJUX, -0.82%
reflecting his view that bonds will break.

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